In August 2021, the Securities and Exchange Board of India (SEBI) merged 2 debt securities regulations viz, SEBI (Issue and Listing of Debt Securities) Regulations, 2008 and SEBI (Non-Convertible Redeemable Preference Shares) Regulations, 2013 into a single Regulation called – SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.
- Objective: To ease the compliance burden on listed entities and to coordinate with the Companies Act, 2013, and the SEBI’s LODR (Listing Obligations and Disclosure Requirements) rules.
Key Points:
i.Under the newly formed regulation, SEBI issued frameworks for the issuance, listing and trading of Non-convertible Securities (NCS), Securitised Debt Instruments, Security Receipts, and Commercial Paper (CP).
ii.The regulations enabled the Issuers (other than unlisted Real estate investment trusts (REITs) and Infrastructure investment trusts (InvITs)) who have an existence history of less than 3 years to tap the bond market with the following conditions.
Conditions:
- The issuers should issue debt securities only on a private placement basis.
- Irrespective of the issue size, the issue should be made on the EBP (electronic book mechanism) platform.
- The issue is open for subscription only to Qualified Institutional Buyers (QIBs).
iii.The parameters to identify risk factors are also introduced under the new rules to assist issuers in providing risk factors.
iv.The option for call and put was included for debt securities issued on a private placement basis.
v.The provision for creating charge over the properties/assets/shares of the issuer has been harmonised with the Companies Act.
vi.For roll over (extending) the debt securities, the provision of e-voting was introduced.
vii.The framework also includes the guidelines for the application process (in case of public issues of securities), timelines for listing, application form, abridged prospectus, disclosure of cash flows, etc. Click here to know more
Note – The new regulations which will come into force from August 16, 2021, were issued in exercise of powers under Section 11(1) of SEBI Act, 1992.
Recent Related News:
In June 2021, SEBI approved amendments to regulations related to IDs under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations).
About Securities and Exchange Board of India (SEBI):
Establishment – 1992 in accordance with the SEBI Act, 1992.
Headquarters – Mumbai, Maharashtra
Chairman – Ajay Tyagi
